The success of China's reform and development in the last thirty-three years has attracted global attention. The major steps which have led to China's success exhibit many Chinese characteristics. Of these the most striking is the ownership reforms in the state and other non-private sectors. The theoretical and policy preparations for ownership reforms took more than ten years. From being heterodox in the mid-1980s they had become mainstream thinking by the mid-1990s.

Professor Li Yining was arguably the most eminent figure in this process. His most influential public speech on ownership reform, entitled “Basic Thoughts on Economic Reforms” (Essay no. 3 in this Selection), was delivered on 25 April 1986 in Peking University. His famous remark “Economic reforms in China may break down if price reform fails. The success of economic reforms, however, hinges not on price reform, but on ownership restructuring” soon appeared in the headlines of a number of leading reformist newspapers and later on became a new proverb in the discourse of Chinese reforms.

In the mid-1980s, “market socialism,” which was initially promoted by Oscar Lange and Abba Lerner, was the guiding principle of economic reforms in China and Eastern European socialist countries. This principle advocated that the introduction of autonomy to state-owned enterprises (SOEs) would induce SOEs to behave like profit-maximizing firms.